The Federal Trade Commission (FTC) of the United States has officially adopted a new rule mandating that companies, particularly streaming services like Netflix, allow users to cancel their subscriptions with just one click.
The decision states that the cancellation process should be "at least as easy to use" as the signup process.
FTC Chair Lina Khan commented (via Reuters) that this new rule is a somewhat overdue response to the increasing number of complaints from users about how "absurdly difficult" it can be to cancel subscriptions to services.
"Companies should not be able to trick you into paying for subscriptions you don’t need," Khan stated.
The rule prohibits companies, whose customers signed up via an app or website, from offering subscription cancellations through chatbots or other agents. Instead, businesses must reach out via phone or message to customers who subscribed "in person" to provide cancellation options.
The rule also stipulates that streaming services, gyms, and other businesses must obtain prior consent from the customer before renewing a subscription or converting a free trial into a paid one.
Last year, the FTC sued Amazon, accusing it of deceiving customers and automatically renewing subscriptions. The lawsuit also highlighted that the design of the company's website "nudged" customers toward signing up for Prime.
A similar complaint was filed against Adobe for "hidden" cancellation fees and a confusing cancellation process. The FTC noted that the company failed to clearly disclose its terms to customers, including the annual subscription duration and charges for early termination.
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